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TMI Blog2017 (1) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/PUN/2016, 1954/PUN/2016, 2000/PUN/2016 2001/PUN /2016, 2002/PUN/2016, 2003/PUN/2016, 2004/PUN/2016, 2005/PUN/2016, 2006/PUN/2016, 2007/PUN/2016, 2008/PUN/2016 to 2010/PUN/2016, 2012/PUN/2016, 2013/PUN/2016 to 2016/PUN /2016, 2021/PUN/2016, 2022/PUN/2016, 2104/PUN/2016, 2106/PUN/2016, 2108/PUN/2016 to 2110/PUN/2016, 2112/PUN/2016, 2114/PUN/2016, 2116/PUN/2016, 2118/PUN/2016, 2120/PUN/2016, 2124/PUN/2016 to 2127/PUN/2016, 2128/PUN/2016 2129/PUN/2016, 2130/PUN/2016 2131/PUN/2016, 2137/PUN/2016 2138/PUN/2016, 2251/PUN/2016 to 2255/PUN/2016 2298/PUN/2016, 2029/PUN/2016, 2032/PUN/2016, 2037/PUN/2016 to 2039/PUN/2016, 2041/PUN/2016, 2043/PUN/2016 To 2062/PUN/2016 For The Appellant : Shri C.H. Naniwadekar, Shri Suhas Bora, Shri C.H. Naniwadekar, Shri Rama Krishnan For The Respondent : Shri P.L. Kureel, Shri Hitendra Ninawe ORDER PER SUSHMA CHOWLA, JM: This bunch of appeals filed by different assessee are against respective orders of CIT(A) relating to different assessment years against respective intimation issued under section 200A(3) of the Income-tax Act, 1961 (in short the Act ). 2. Bunch of present appeals relating to different assessee were h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayments made on account of interest for the respective quarters in the accounting periods 2012-13, 2013-14 and 2014-15. The assessee was required to file quarterly TDS returns intimating the tax deducted at source from various payments made in each of the quarter, as per section 200(3) of the Act. Further, the requirement of the Act was to file the said TDS returns within stipulated period as provided under the section. Admittedly, in the present appeals, the TDS returns were filed belatedly. The Assessing Officer while processing the TDS returns issued intimation to the respective assessee under section 200A of the Act and levied late filing fees under section 234E of the Act. 7. In appeal, the CIT(A) held that the Assessing Officer was empowered to raise the said demand under section 234E of the Act while issuing intimation under section 200A of the Act. 8. The assessee is in appeal against the orders of authorities below. 9. We have heard the rival contentions and perused the record. The issue arising in the present appeals i.e. against levy of fees under section 234E of the Act while issuing intimation under section 200A of the Act arose before the Tribunal in bunch of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other person, by whatever name called, who is responsible for crediting such sum or tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed. (3) Any person deducting any sum on or after the 1st day of April, 2005 in accordance with the foregoing provisions of this Chapter or, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax deducted to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed: Provided that the person may also deliver to the prescribed authority a correction statement for rectification of any mistake or to add, delete or upda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Rules, 1962 (in short the Rules ) provides that every person who is responsible for deduction of tax under Chapter XVIIB shall in accordance with the provisions of section 200(3) of the Act, deliver or cause to be delivered, the quarterly statements to the Director General of Income Tax (Systems) or the persons authorized by them i.e. in respect of deductions under various provisions of the Chapter XVIIB. The Rule further provides that the statements referred to in sub-rule (1) are to be delivered quarterly and the stipulated period of due date of filing the said statement in respect of deductor being an office of the Government and the deductor being other than Government, are provided. The sub-rule (3) of Rule 31A of the Rules further provides that the statement referred to in sub-rule (1) may be furnished in any of the following manners i.e. by way of furnishing the statement in paper form or furnishing the statement electronically under digital signature or after verification. Initially, such statement had to be furnished in paper form and later by way of amendment, the procedure for furnishing the statement electronically was provided. Once the statement has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 200A of the Act lays down the manner in which the statements of tax deducted at source are to be processed for issuing the intimation. First of all, the sums deductible under the Chapter are to be computed and interest, if any, shall be computed on the basis of such sums deductible as computed in the statements as per clause (a) and (b) under section 200A(1) of the Act. Clauses (c) to (f) reproduced above were substituted for clauses (c) to (e) by the Finance Act, 2015 w.e.f. 01.06.2015. Prior to the substitution, clauses (c) to (e) read as under:- (c) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of amount computed under clause (b) against any amount paid under section 200 and section 201, and any amount paid otherwise by way of tax or interest; (d) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (c); and (e) the amount of refund due to the deductor in pursuance of the determination under clause (c) shall be granted to the deductor. 21. As per newly substituted clause (c) w.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e paid along with statement which is to be delivered under the provisions of section 200(3) of the Act. Though the statement of tax deducted at source has to be furnished by the deductor, no doubt, under section 200 of the Act, but the same has to be processed by the prescribed authority as per provisions of section 200A of the Act. In case there is any variation in the tax, sum deductible under the Chapter and / or their payment, the Assessing Officer is empowered to make adjustments in this regard and also reject incorrect claim made by the deductor which is apparent from the information in the statement filed by the deductor. Further, the Incometax authority is authorized to charge interest, if any, and the same shall be computed on the basis of sums deductible in addition to the amount of tax deducted at source, which is to be paid to the account of Treasury by the deductor. In case of any default, interest is to be charged against such deductor and the same is to be computed as per provisions of section 200A(1)(b) of the Act. Further, in addition to both these amounts, clause (c) to section 200A of the Act provides fees to be levied which shall be computed in accordance with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard, then the provisions which has to be considered is section 200A(1)(c) of the Act. The power to charge / collect fees as per provisions of section 234E of the Act was vested with the prescribed authority under the Act only on substitution of earlier clause (c) to section 200A of the Act by the Finance Act, 2015 w.e.f. 01.06.2015. Once any provision of the Act has been made applicable from a respective date, then the requirement of the statute is to apply the said provisions from the said date. 25. In respect of the issue raised before us, it is clear that the prescribed authority has been vested with the power to charge fees under section 234E of the Act only with regard to levy of fees by the substitution made by Finance (No.2) Act, 2015 w.e.f. 01.06.2015. Once the power has been given, under which any levy has to be imposed upon tax payer, then such power comes into effect from the date of substitution and cannot be applied retrospectively. The said exercise of power has been provided by the statute to be from 01.06.2015 and hence, is to be applied prospectively. There is no merit in the claim of Revenue that even without insertion of clause (c) under section 200A(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistics Ltd. Vs. DCIT in ITA Nos.2689 -2691/Ahd/2015, ITA No.2692/Ahd/2015, relating to assessment year 2014-15, ITA No.2693/Ahd/2015, relating to assessment year 2013-14 and ITA Nos.2694- 2695/Ahd/2014, relating to assessment year 2013-14, vide consolidated order dated 26.11.2015 and Chandigarh Bench of Tribunal in M/s. Khanna Watches Ltd. Vs. DCIT in ITA Nos.731 to 735/CHD/2015, relating to assessment years 2014-15 2013-14, order dated 29.10.2015. 27. While deciding the present bunch of appeals, the Revenue had placed reliance on the ratio laid down by the Hon ble Bombay High Court in Rashmikant Kundalia Vs. Union of India (supra) wherein, the constitutional validity of section 234E of the Act was challenged. The Hon ble High Court noted the fact that where the deductor was required to furnish periodical quarterly statements containing the details of deduction of tax made during the quarter, by the prescribed due date and the delay in furnishing such TDS returns would have cascading effect. It was further observed by the Hon ble High Court that under the Income-tax Act, where there is an obligation on the Income-tax Department to process the income-tax returns within spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, the case of the learned CIT-DR before us was that there is no merit in the present set of appeals filed by the assessee as the Hon ble High court has laid down that no appeal is provided from an order passed under section 234E of the Act and the same merits to be dismissed at the outset. In this regard, he has raised two issues that (a) the appeal filed by the assessee is not maintainable and also (b) there is no merit in the claim of the assessee that the Assessing Officer is not empowered to charge fees under section 234E of the Act before insertion of clause (c) to section 200A(1) of the Act by the Finance Act, 2015 w.e.f. 01.06.2015. The learned Authorized Representative for the assessee on the other hand, drew our attention to the Memorandum to the Finance Bill, 2015 while introducing the said clause (c) to section 200A(1) of the Act. The Finance Bill took note of the provisions of Chapter XVIIB, under which the person deducting tax i.e. deductor was required to file quarterly tax deduction at source statement containing the details of deduction of tax made during the quarter by the prescribed due dates. Similar responsibility is on a person required to collect tax of ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided that the amendment would take effect from 01.06.2015. 29. The perusal of Memo explaining the provision relating to insertion of clause (c) to section 200A of the Act clarifies the intention of Legislature in inserting the said provision. The provisions of section 234E of the Act were inserted by the Finance Act, 2012, under which the provision was made for levy of fees for late furnishing TDS / TCS statements. Before insertion of section 234E of the Act, the Finance (No.2) Act, 2009 had inserted section 200A in the Act, under the said section, mechanism was provided for processing of TDS statements for determining the amount payable or refundable to the deductor, under which the provision was also made for charging of interest. However, since the provisions of section 234E of the Act were not on statute when the Finance (No.2) Act, 2009 was passed, no provision was made for determining the fees payable under section 234E of the Act at the time of processing the TDS statements. So, when section 234E of the Act was introduced, it provided that the person was responsible for furnishing the TDS returns / statements within stipulated period and in default, fees would be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases where TDS statements / returns were filed belatedly to pay the fees as per said section. However, in cases, where the assessee has failed to deposit the said fees, then in order to enable the Assessing Officer to collect the said fees chargeable under section 234E of the Act, it is incumbent upon the Legislature to provide mechanism for the Assessing Officer to charge and collect such fees. In the absence of enabling provisions, the Assessing Officer while processing the TDS statements, even if the said statements are belated, is not empowered to charge the fees under section 234E of the Act. The amendment was brought in by the Finance Act, 2015 w.e.f. 01.06.2015 and such an amendment where empowerment is given to the Assessing Officer to levy or charge the fees cannot be said to be clarificatory in nature and hence, applicable for pending assessments. 32. The Hon ble Supreme Court in CIT Vs. Vatika Township Pvt. Ltd. (supra) has explained the general principle concerning retrospectivity and have held that of the various rules guiding how a legislation has to be interpreted, one established rule is that unless contrary intention appears, a legislation is presumed not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 234E of the Act. The Hon ble High Court notes that the Finance Act, 2015 had made amendments to section 200A of the Act enabling the Assessing Officer to make adjustments while levying fees under section 234E of the Act was applicable w.e.f. 01.06.2015 and has held that it has prospective effect. Accordingly, the Hon ble High Court held that intimation raising demand prior to 01.06.2015 under section 200A of the Act levying section 234E of the Act late fees is not valid . However, the Hon ble High Court kept open the issue on constitutional validity of section 234E of the Act. We have already referred to the decision of Hon ble Bombay High Court in Rashmikant Kundalia Vs. Union of India (supra) in this regard, wherein the constitutional validity of section 234E of the Act has been upheld. 34. Accordingly, we hold that the amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the intimation issued by the Assessing Officer under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied prospectively. In any case, the Parliament itself has recognized its operation to be prospective in nature while introducing clause (c) to section 200A(1) of the Act and hence, cannot be applied retrospectively. Similarly, reliance placed upon by the learned CIT -DR on the ratio laid down by the Hon ble Supreme Court in Govinddas Vs. ITO (supra) is misplaced because of the distinguishable facts and issues. 10. The issue arising in the present appeals is identical to the issue before the Tribunal in bunch of appeals and where the amendment to section 200A(1) of the Act is procedural in nature, then the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Accordingly, intimation issued by the Assessing Officer under section 200A of the Act in all the appeals does not stand and the demand raised by charging the fees under section 234E of the Act is not valid and the same is deleted. The grounds of appeal raised by the assessee are thus, allowed. 11. In the result, all the appeals of assessee are allowed. Order pronounced on this ..... 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